Intermittent Jupyter Interactive Window Hangs and Extension Host Instability After VS Code Update to 1.127.0

[mestrits]

Type: Bug

After updating to VS Code 1.127.0 on July 7, 2026, I began experiencing intermittent stability issues when using Python through the Jupyter Interactive Window (#%% cells).

Environment:

VS Code: 1.127.0
Jupyter Extension: 2025.9.1
Python Extension: 2026.4.0
Python: 3.12.13
Local virtual environment (.venv)
Windows
Files stored in OneDrive for Business locations

Symptoms:

Interactive Window cells intermittently remain in a pending/executing state indefinitely.
Simple commands such as:
print("test")
len(df)
occasionally hang and never execute.

Subsequent cells queue behind the first pending cell and do not run.
Variable Explorer frequently displays: Loading Variables
indefinitely

Jupyter Interactive Window occasionally fails to open with:
Failed to request creation of interactive window from VS Code

Browser-based authentication attempts are being triggered on:
http://localhost:/signin
and sometimes spins indefinitely.

Log Messages Observed:
Extension host is unresponsive

Troubleshooting Performed:

Restarted VS Code multiple times.
Restarted Jupyter kernels.
Created a fresh terminal session.
Verified correct virtual environment activation.
Verified Python executable path.
Verified Jupyter kernel registration.
Tested pandas and openpyxl functionality directly from a terminal Python session.

Additional Findings:

Python environment appears healthy.
Terminal execution works normally:
Large DataFrames can sometimes be loaded and manipulated successfully before the issue reappears.
The behavior is intermittent and difficult to reproduce consistently.

I've never had any issues like this until i updated VSCode earlier today. The problems began immediately after updating VS Code.

Expected Behavior
Interactive Window cells should execute reliably, Variable Explorer should load consistently, authentication flows should complete normally, and Jupyter sessions should not become stuck or require frequent kernel restarts to recover.

VS Code version: Code 1.127.0 (4fe60c8, 2026-06-30T10:52:33+02:00)
OS version: Windows_NT x64 10.0.26200
Modes:

System Info

Item	Value
CPUs	13th Gen Intel(R) Core(TM) i9-13900H (20 x 2995)
GPU Status	2d_canvas: enabled GPU0: VENDOR= 0x8086, DEVICE=0xa7a0 [Intel(R) Iris(R) Xe Graphics], DRIVER_VENDOR=Intel, DRIVER_VERSION=32.0.101.7085 ACTIVE GPU1: VENDOR= 0x10de, DEVICE=0x25bc [NVIDIA RTX A1000 6GB Laptop GPU], DRIVER_VERSION=32.0.15.9595 GPU2: VENDOR= 0x8086, DEVICE=0xa7a0 [Intel(R) Iris(R) Xe Graphics], DRIVER_VERSION=32.0.101.7085 GPU3: VENDOR= 0x1414, DEVICE=0x008c [Microsoft Basic Render Driver], DRIVER_VERSION=10.0.26100.8521 Machine model name: Machine model version: direct_rendering_display_compositor: disabled_off_ok gpu_compositing: enabled multiple_raster_threads: enabled_on opengl: enabled_on rasterization: enabled raw_draw: disabled_off_ok skia_graphite: disabled_off trees_in_viz: disabled_off video_decode: enabled video_encode: enabled webgl: enabled webgpu: enabled webnn: disabled_off
Load (avg)	undefined
Memory (System)	31.64GB (5.00GB free)
Process Argv	--crash-reporter-id 8ff5ee0c-2aef-4812-9e7d-8f983301c044
Screen Reader	no
VM	0%

Extensions (46)

Name	Identifier	Author	Version
SQLite	alexcvzz.vscode-sqlite	alexcvzz	0.14.1
Django	batisteo.vscode-django	batisteo	1.15.0
Markdown Preview Mermaid Support	bierner.markdown-mermaid	bierner	1.32.1
Path Intellisense	christian-kohler.path-intellisense	christian-kohler	2.10.0
One Dark Modern	cweijan.onedark-modern	cweijan	2.0.0
markdownlint	davidanson.vscode-markdownlint	DavidAnson	0.61.2
DBCode - SQL & Database Client for Postgres, MySQL, MongoDB & more	dbcode.dbcode	dbcode	1.35.8
Python Extension Pack	donjayamanne.python-extension-pack	donjayamanne	1.7.0
Code Runner	formulahendry.code-runner	formulahendry	0.12.2
python snippets	frhtylcn.pythonsnippets	frhtylcn	1.0.2
Spreadsheet Viewer	grapecity.gc-excelviewer	GrapeCity	4.2.66
Draw.io Integration	hediet.vscode-drawio	hediet	1.9.0
Python Indent	kevinrose.vsc-python-indent	KevinRose	1.21.0
MagicPython	magicstack.magicpython	magicstack	1.1.0
Rainbow CSV	mechatroner.rainbow-csv	mechatroner	3.24.1
.NET Install Tool	ms-dotnettools.vscode-dotnet-runtime	ms-dotnettools	3.1.0
Data Workspace	ms-mssql.data-workspace-vscode	ms-mssql	0.6.3
SQL Server (mssql)	ms-mssql.mssql	ms-mssql	1.43.0
SQL Bindings	ms-mssql.sql-bindings-vscode	ms-mssql	0.4.1
SQL Database Projects	ms-mssql.sql-database-projects-vscode	ms-mssql	1.6.1
Python Debugger	ms-python.debugpy	ms-python	2026.6.0
Python	ms-python.python	ms-python	2026.4.0
Pylance	ms-python.vscode-pylance	ms-python	2026.2.1
Python Environments	ms-python.vscode-python-envs	ms-python	1.37.2026070201
Data Wrangler	ms-toolsai.datawrangler	ms-toolsai	1.24.2
Jupyter	ms-toolsai.jupyter	ms-toolsai	2025.9.1
Jupyter Keymap	ms-toolsai.jupyter-keymap	ms-toolsai	1.1.2
Jupyter Notebook Renderers	ms-toolsai.jupyter-renderers	ms-toolsai	1.3.0
Jupyter Cell Tags	ms-toolsai.vscode-jupyter-cell-tags	ms-toolsai	0.1.9
Jupyter Slide Show	ms-toolsai.vscode-jupyter-slideshow	ms-toolsai	0.1.6
One Dark Theme	mskelton.one-dark-theme	mskelton	1.14.3
autoDocstring - Python Docstring Generator	njpwerner.autodocstring	njpwerner	0.6.1
Python Type Hint	njqdev.vscode-python-typehint	njqdev	1.5.1
Material Icon Theme	pkief.material-icon-theme	PKief	5.36.1
Material Product Icons	pkief.material-product-icons	PKief	1.7.1
R	reditorsupport.r	REditorSupport	2.8.8
R Syntax	reditorsupport.r-syntax	REditorSupport	0.1.4
Fabric Data Engineering VS Code	synapsevscode.synapse	SynapseVSCode	1.25.0
Ayu	teabyii.ayu	teabyii	1.1.12
R Markdown All in One	tianyishi.rmarkdown	TianyiShi	0.0.14
vscode-pdf	tomoki1207.pdf	tomoki1207	1.2.2
vscode-icons	vscode-icons-team.vscode-icons	vscode-icons-team	12.19.0
Jinja	wholroyd.jinja	wholroyd	0.0.8
Markdown PDF	yzane.markdown-pdf	yzane	2.1.0
Markdown All in One	yzhang.markdown-all-in-one	yzhang	3.6.3
One Dark Pro	zhuangtongfa.material-theme	zhuangtongfa	3.19.0

A/B Experiments

vsliv368cf:30146710
binariesv615:30325510
nativeloc1:31344060
dwcopilot:31170013
dwoutputs:31242946
copilot_t_ci:31333650
e5gg6876:31282496
pythonrdcb7:31342333
6518g693:31463988
aj953862:31281341
6abeh943:31336334
envsactivate1:31538736
478i5457:31544283
cloudbuttont:31379625
42190218_ostrepl:31403339
56b7f661:31457055
ec5jj548:31422691
cp_cls_t_966_ss:31526232
4je02754:31466945
8hhj4413:31478653
cp_cls_c_1081:31454833
conptydll_true:31498968
e9c30283:31461165
test_treatment2:31471001
46204921:31447328
idci7584:31464702
e3e4d672:31494082
ei9d7968:31496641
chat:31457767
7e187181:31503455
ghj88844:31499326
ddid_t:31478206
hmra_i5g22:31518061
7df3h592:31512476
cp_cls_t_1082:31535311
logging_enabled_new:31498466
db5d2638:31499441
jb_cp_cls_t_632:31543129
852d2892:31506239
748c7209:31512887
32d76977:31512328
ha629193:31508444
cdk-lw-on:31524445
f9bf7985:31543584
31fi7170_t:31522396
a1ije391_t:31540920
hgf2d445:31529595
41836166:31537719
prpt_srch:31518468
jbcp_cls_pctr_t:31531130
61138546:31518536
cp_intellij_t_nes:31533504
jf4hg949:31526829
h561g132:31533256
sessions_5:31532894
ihg5j128:31534457
jh7i3328:31546038
9gg7f176:31542112
nes-nc-lc-nf:31546584

[coragoro55]

jupyter_fix_v1.zip
Man, that update totally trashed my Jupyter setup too. Looks like a race condition with the extension host and OneDrive sync locks. I found a quick way to bypass the auth loop and kernel hang by patching the local server handshake.

[mestrits]

Additional Findings / Symptoms

Issue reproduced in both:

Jupyter Interactive Window (#%%)
Standard .ipynb notebooks

In a fresh new notebook, even a simple cell such as:
x = 1
remains indefinitely pending.

During these events:

Cell execution never starts.
Variable Explorer shows no variables.
Notebook controls such as Interrupt, Restart, and Go To may become unresponsive or show continuous loading indicators.
Additional cells queue behind the first pending cell and never execute.

Performed additional troubleshooting to isolate the issue from the Python environment.
Environment Verification

Virtual environment is active and being used correctly:
where.exe python
-> .venv\Scripts\python.exe

Jupyter executable is coming from the same venv:
where.exe jupyter
-> .venv\Scripts\jupyter.exe

UV environment appears healthy:
uv 0.11.21

Python terminal execution works normally:
import pandas as pd
pd.read_excel(...)
len(df)
all execute successfully.

[mestrits]

Man, that update totally trashed my Jupyter setup too. Looks like a race condition with the extension host and OneDrive sync locks. I found a quick way to bypass the auth loop and kernel hang by patching the local server handshake.

Thanks for the data point. I'm seeing similar symptoms after updating to VS Code 1.127.0 today, including intermittent notebook execution hangs, Variable Explorer issues, unresponsive extension host events, and occasional localhost sign-in loops. However, my testing so far has only established correlation with the update—not a confirmed root cause. Python, pandas, openpyxl, Jupyter, and my virtual environment all appear healthy when used directly from a terminal. I'm still trying to determine whether this is an extension-host issue, notebook session initialization issue, authentication issue, or something else.

[gjsjohnmurray]

@mestrits are you able to remove OneDrive from the equation to check @coragoro55's assertion?

Maybe also configure a profile with the smallest set of extensions required to support your use case, in case another extension is blocking / crashing the extension host process shared by all extensions.